Climate Shocks, Cyclones, and Economic Growth: Bridging the Micro-Macro Gap
Empirical analyses of climatic event impacts on growth, while critical for policy, have been slow to be incorporated into macroeconomic climate-economy models. This paper proposes a joint empirical-structural approach to bridge this gap for tropical cyclones. First, we review competing empirical approaches in a harmonized global dataset and through a theory lens. Second, we estimate cyclone impacts on structural determinants of growth (productivity, depreciation, fatalities) to quantify a stochastic growth model for 40 vulnerable countries and project welfare effects of climate-driven cyclone risk changes. Third, we compute cyclone impacts on the social cost of carbon in the seminal DICE model.
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Copy CitationLaura Bakkensen and Lint Barrage, "Climate Shocks, Cyclones, and Economic Growth: Bridging the Micro-Macro Gap," NBER Working Paper 24893 (2018), https://doi.org/10.3386/w24893.Download Citation
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Published Versions
Laura A Bakkensen & Lint Barrage, 2026. "Climate Shocks, Cyclones and Economic Growth: Bridging the Micro-Macro Gap," The Economic Journal, Royal Economic Society, vol. 136(673), pages 279-310. citation courtesy of 
Laura A Bakkensen & Lint Barrage, 2026. "Climate Shocks, Cyclones and Economic Growth: Bridging the Micro-Macro Gap," The Economic Journal, vol 136(673), pages 279-310.
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